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Monday, 05 November 18
TIGHTER FUEL RULES COULD RAISE SHIPOWNERS' COSTS AND CAPEX - FITCH RATINGS
 More stringent fuel regulations regarding sulphur content could significantly increase global shipping companies’ operating costs and capex needs, Fitch Ratings says. This may negatively affect their credit quality unless they manage to pass these costs to customers. Many shipping companies have started implementing fuel surcharges to recover costs associated with the new sulphur cap regulation, but their ability to sustain these will depend on market fundamentals, which remain challenging.
Competitive dynamics may change in the longer term with companies that are less financially able to absorb additional costs, especially given higher oil prices, withdrawing from the market. Reduced competitive pressures could then support a better supply-demand balance and allow the remaining shipping companies to raise freight rates in a bid to recoup some of the extra costs. The change in shipping fuel consumption could also affect refineries.
International Maritime Organization rules requiring ships to use fuel with sulphur content no higher than 0.5% (compared with 3.5% currently) come into effect on 1 January 2020. This means that shipping companies need to switch to higher-quality and more expensive marine fuel, use special equipment (“scrubbers”) to reduce sulphur emissions or switch to alternative fuels, such as liquefied natural gas (LNG). The new regulation will apply globally. Sulphur Emission Control Areas were established in a limited number of sea areas in 2005 and the sulphur content limit for fuel in those areas was tightened to 0.1% in 2015.
The global shipping industry fuel cost bill could increase by up to USD60 billion a year as a result of the new rules from 2020 for a total merchant fleet of 60,000 vessels, according to Wood Mackenzie. According to Maersk Line, its additional fuel costs would be over USD2 billion with a cost for the container shipping industry as a whole of up to USD15 billion, based on the difference in price of fuel with 3.5% and 0.5% sulphur content.
Scrubbers could be a viable alternative for some companies, but require several million dollars in upfront investments for each ship. Furthermore, scrubbers’ manufacturing and installing capacity is limited to fitting only about 2,000 scrubbers by 2020, according to Norwegian bank SEB. The LNG option will also require investments to retrofit ship engines and capacity to carry high-volume LNG tanks. In addition, LNG refuelling infrastructure may not be readily available globally.
The impact of the new regulation is unlikely to be uniform across segments. Ship owners that lease out ships with fuel costs borne by the charterer will be significantly less affected than operators that cover the fuel bill themselves if fuel surcharges related to the sulphur cap are not sustained.
If a significant proportion of shipping companies opt for higher-quality, low-sulphur fuel to comply with the regulations, the balance in the oil products market, and therefore refineries, may be affected. The 4 million barrel a day marine fuel market has been absorbing residue from the refining process, so there may be a need for refineries to adjust processes if demand for heavy fuel drops.
Demand for higher-quality fuel could lead to higher prices and widen pricing differentials between low- and high-sulphur products. Refineries with a higher share of middle distillates in their output, which are required to produce low-sulphur marine fuel, will benefit from the change. Low-complexity refineries will be hit and may need to invest in upgrades to shift their output towards middle distillates.
Source: Fitch Ratings
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Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
Wednesday, 03 October 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
The bunker fuel supply and availability landscape is close to its transformation with the enforcement of the IMO’s global 0.5% fuel Sulphur c ...
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- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Planning Commission, India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
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